Sunday, January 13, 2013

Using Young Guns & Big Guns

When this CEO Blogger was in Sales 30 years ago at Merrill Lynch, I signed a very large international oil company, headquartered in the US, based in Texas. I was very proud of myself for accomplishing this signing because this particular client had been with our major competitor for more than 17 years. When meeting with my boss, I mentioned that I had worked hard on this deal for more than a year. My boss congratulated me for my accomplishment; but then went on to say that in fact, if I reviewed the paper file (in those days there were no computer files) I could see that our company had actively pursued this client for 17 years, which was very true. Not to diminish my effort, his point was that ultimately company's sign clients as a result of on-going investment; not just sales guys, though a particular sales guy may make it happen. I never forgot that lesson.

In any case, as we were working on the deal, the Procurement Manager at the oil company asked that I bring our Big Guns in for a meeting. Of course, given the size of this account it was a perfectly reasonable request so I orchestrated a meeting that included my Executive Vice President boss and the President of our company. I thought this was going to be a meet and greet; but I soon learned that this savvy Southern Procurement Manager had another agenda in mind.

By the way, when I was young and in Sales, I often got worked by crafty Southerners, who saw me as a young Northerner, coming from California to sell to them. I usually saw it happening after the fact; but since I was signing lots of accounts in the South, it was always a learning experience that I found humorous. These good ole boy Southerners very often acted like hay seeds; but they were always really very smart business people. Today, when selling in the South, you would be as likely to encounter someone across the table from Chicago, or New York than a Southerner; but that was not typical 30 years ago.

In any case, as we convened our meeting with the oil company Procurement Manager and our Senior Management in the room, it very quickly became apparent that the Procurement Manager's objective was to negotiate pricing that I thought was settled.This was definitely not a meet and greet. It became very clear that the Procurement Manager was trying to get our President to commit to lower pricing on the spot, knowing that if he said Yes, right then and there, that there would be no additional negotiations.

Our President was a very bright guy and CPA by education. Though he was definitely a Northerner and well educated, he had a boyish, folksy style. Rather than negotiate with the Procurement Manager, he deferred to me, the Young Gun in the room, by saying that he just wasn't close enough to the numbers to act authoritatively in agreeing to any deal on the spot. What was very funny about this tactic is that our President, as a CPA, knew those numbers better than anyone else in the room. But he also knew that as our President if he started negotiating with this Procurement Manager that it might lead to lower pricing without proper analysis.

So, by deferring the pricing discussion to me for another time, our President actually out foxed this crafty Southern Procurement Manager. In the end, we put the deal together, with pricing approved by our senior management, after proper analysis. As a young sales guy, I learned a lot from this scenario. There is a time for Young Guns and a time for Big Guns to close a deal. The Big Guns should be used sparingly on the front line because they are the last word on every issue. That does not mean that the Big Guns are not involved behind the scenes, while a deal is in progress; but the Big Guns should never be used to do initial work better done by the Young Guns. This process best allows for mutually agreeable pricing that is based on sound thinking, rather than emotional, high pressure negotiations.